Author: OBG Admin

Pham Hong Hai-CEO-HSBC Vietnam

Diversifying production: The Kingdom invests in a broad range of areas both upstream and downstream

Posted OBG AdminPosted in Uncategorized

When OPEC’s member states announced that their crude oil production target would remain at 30m barrels per day (bpd) at a meeting in Vienna on November 28, 2014, Saudi Arabia was accused of waging a price war to preserve market share. The implication was that the country wanted to see the price of Brent crude fall so low that drillers in the US shale boom would no longer be able to break even. The OPEC decision sent the price of US crude tumbling by 10% on that Friday’s trading, its steepest one-day fall in five years. Brent crude prices, which had hit $114 a barrel

Emmanuel Macron-President of France

Aiding diversification: Key players are investing further down the petrochemicals value chain

Posted OBG AdminPosted in Uncategorized

Falling demand and rising competition for feedstock, alongside a national push to bring the price of raw materials closer to market rates, are combining to put pressure on Saudi Arabia’s petrochemicals industry. The price of petrochemicals dropped to a five-year low at the beginning of 2015 on the back of easing demand across a number of key markets. The operating environment is expected to remain challenging in the coming months, with little to indicate a significant pick-up in global economic activity, although forecasts of growth in Asian markets suggest a more positive outlook for producers in the longer term. STRONG FUNDAMENTALS: However, as Saudi Arabia’s

Pham Hong Hai-CEO-HSBC Vietnam

World leader: Efforts under way to expand desalination capacity

Posted OBG AdminPosted in Uncategorized

The Kingdom leads the world in the production and consumption of desalinated water, and with an estimated SR91bn ($24.3bn) of expansion plans in the pipeline until 2020, as well as privatisation in the offing, the sector offers opportunities for a range of investors. FLOATATION: The notion of privatising the Saline Water Conversion Corporation (SWCC) has been debated for several years and the state-owned company, which is responsible for almost 60% of desalination in the Kingdom, has been making changes to its structure and operations to facilitate the move for some time. According to a Reuters report in January 2015, the proposal reportedly being studied involves

Pham Hong Hai-CEO-HSBC Vietnam

Breaking boundaries: Businesses are beginning to merge IT and telecoms provision

Posted OBG AdminPosted in Uncategorized

With the arrival of mobile virtual network operators (MVNOs) targeting those with less to spend on telephony, the Kingdom’s larger operators are hoping to garner profits from contracts with more lucrative segments of the population including businesses and corporate clients. Their strategy is driven in part by the Saudi government’s expansive budgetary stance and its continued spending on major infrastructure projects, which create the need for additional and improved telecoms and ICT networks. While the Saudi Telecoms Company (STC) and Mobily are each further sub-dividing their business client offerings into solutions for small, medium or large enterprises, Zain offers a more generic package of business

Mark Geilenkirchen-CEO-Port of Sohar

A third pillar: The government is turning its attention to mining and processing to complement hydrocarbons and petrochemicals

Posted OBG AdminPosted in Uncategorized

While Saudi Arabia may traditionally have seen the oil fields in its Eastern Province as the source of its wealth, the gold, phosphates and bauxite found in its western and northern regions promise to provide a third pillar of the economy by complementing oil and petrochemicals. Billions of dollars will be ploughed into mining, infrastructure and processing in the next three years, and the plan is to use these developments to create manufacturing industries further down the value chain. MINING COMPANY: Serious efforts to capitalise

Ahmed Zaki Abdeen-Chairman-New Administrative Capital for Urban Development

Enhancing food security: Local companies are looking abroad to invest in farmland and agricultural infrastructure

Posted OBG AdminPosted in Uncategorized

The Kingdom’s agricultural sector is a little unusual by the standards of emerging markets. Whereas in many countries the major challenge is turning primary production into higher-value end products, Saudi Arabia is faced with the opposite issue. The Kingdom has developed a highly successful processing industry. However, this sector is restrained to a certain extent by a reliance on imports of raw materials. FOCUS ON WATER: Ever since the government made the strategic decision to focus on water security in 2008, the major challenge has

Mark Geilenkirchen-CEO-Port of Sohar

Cloud atlas: Storing data off site is set to get easier

Posted OBG AdminPosted in Uncategorized

Cloud computing could be one of the keys that will help create a smarter and more efficient Saudi Arabia. However, the authorities recognise that any plans for cloud technology need to be balanced with national security concerns. When the Ministry of Interior chaired a meeting to discuss the implications of the cloud in November 2014, it invited the Ministry of National Guard, the Ministry of Defence and Aviation, the Presidency of the Royal Guard and the General Intelligence Presidency, as well as the ministries representing industry, commerce and communications. Weighing up the threats posed by the cloud against its opportunities is not a new exercise

Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

On the front lines: Enhancing the Kingdom’s cybersecurity readiness

Posted OBG AdminPosted in Uncategorized

The growing security threat posed by cyber-attacks as Saudi Arabia becomes ever more reliant on IT has led to the development of a national information security strategy (NISS) and increasing investment in cybersecurity. Demand for cybersecurity products comes from both the government and private sectors. “Cybersecurity is big business in Saudi Arabia. All the major companies have dedicated significant budgets to ensuring they have the proper protection,” Jean Yves Tolot, CEO of the electronic security firm Thales, told OBG. This has drawn a large number of multinational IT and security companies to the market, with some of them forming innovative partnerships with local IT and

Stuart Tait-Regional Head of Commercial Banking-Asia Pacific

Bulking up: The Kingdom’s ports are expanding to compete internationally

Posted OBG AdminPosted in Uncategorized

Saudi Arabia’s ports are some of the biggest in the region, and the Kingdom’s combined throughput of 194m tonnes per year (excluding crude oil) is the largest volume in the Middle East. However, with the international trend in shipping moving towards consolidation at ever larger ports (and with ever larger container ships), the government has announced plans to invest $30bn in upgrading facilities to enable the Kingdom’s ports to compete on the global stage. As one of the world’s largest exporters of primary products, the Kingdom has an extensive network of ports on its Red Sea and Gulf coasts. However, with the exception of Jeddah

Pham Hong Hai-CEO-HSBC Vietnam

Positive impact: The offset programme brings multiple benefits to local firms

Posted OBG AdminPosted in Uncategorized

Heavy investment in defence procurement by Saudi Arabia has been accompanied by a desire on the part of government to see such spending advance not just the Kingdom’s national security objectives but also its ambitions to become a knowledge-driven economy. Critical to these efforts are foreign expertise and investment in skilled job-creating businesses, and as a result the government set up its Economic Offset Programme (EOP) in the 1980s. Offset rules mandate that successful bidders invest the equivalent of 35% of the value of the technical and service part of contracts in joint ventures (JVs) that will offer high-quality technical jobs to Saudi workers, and